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The Oklahoma City boondoggle Judd Legum

Published

10 months ago

September 18, 2023

An aerial view of former Oklahoma City Thunder point guard Russell Westbrook on June 14, 2012 (Photo by Greg Nelson via Getty Images)

The Oklahoma City Thunder and its fans have made Clayton Bennett and the other owners of the NBA team extraordinarily wealthy.

Bennett purchased the franchise, then called the Seattle Supersonics, in 2006 for $325 million. He moved the team to Oklahoma City in 2008, where it became one of the NBA’s most compelling franchises. The Thunder drafted two future league MVPs, Russell Westbrook and James Harden, to play alongside superstar Kevin Durant, and the trio made a run to the 2012 NBA Finals. Since 2020, the team has undergone a successful rebuild, acquiring multiple talented young players, including All-Star Shai Gilgeous-Alexander, along with a massive stockpile of future draft picks. They are, by some accounts, the NBA team with the brightest future.

Today, the Oklahoma City Thunder are worth an estimated $1.875 billion and generate income of about $130 million annually. Those figures are likely to increase after the NBA negotiates a massive new television contract next year, which is projected to be at least twice as lucrative as the current deal.

For Bennett and the ownership group, however, this isn’t enough. He is demanding massive new subsidies from the taxpayers of Oklahoma City. If the city refuses to pony up, the implicit threat is that Bennett will move the team to a city that will meet his demands.

Currently, the Thunder play in the Paycom Center, which was built in 2002 at taxpayer expense. When the NBA franchise moved to Oklahoma City in 2008, the city approved over $100 million in improvements, including a “new $3.9 million scoreboard,” upgraded “restaurants, clubs, suites,” and new locker rooms. In 2019, the city approved another $115 million in improvements, adding 70,000 square feet to the facility for “more restaurants, premium ticket amenities and expansion of the top level ‘Loud City’ concourse.” The money would also finance a $10.3 million new practice facility for the team, new seats, and a new scoreboard.

About $70 million of those improvements were put on hold in 2022 when the Thunder ownership indicated they were no longer interested in renovating the Paycom Center. Now, Bennett and the other owners want a brand new arena. In July, Oklahoma City Mayor David Holt (R) warned that the team could leave if the city didn’t build the new facility. Bennett originally moved the team from Seattle in 2008 after the city rejected similar demands for a new publicly financed arena.

Previously, Holt said that Thunder ownership had committed to make a “significant financial contribution” to the new arena. Last week, however, plans for a new $900 million arena for the Thunder were finalized. The team contribution would be just $50 million, with taxpayers footing the remainder of the bill. That’s about $3,200 for every Oklahoma City household.

Holt claims building the arena would not require imposing new taxes. But that is misleading. The plan calls for a six-year extension of a one-cent per transaction sales tax, which was previously scheduled to expire in 2028. Moreover, the existing sales tax, known as MAPS 4, funds a variety of programs that benefit the city. Initiatives currently financed by the sales tax include:

A “permanent location for the Oklahoma County Diversion Hub,” an alternative to incarceration for low-level offenders.

A Family Justice Center, “dedicated to helping survivors of domestic violence and sexual abuse.”

“A business support center to help accelerate growth for minority-owned small businesses.”

Bus Rapid Transit for underserved communities.

A new Oklahoma City Animal Shelter.

Crisis centers for mental health, addiction, and affordable housing.

Upgrades of 105 neighborhood and community parks.

Four new youth centers with afterschool and summer programming.

Under the proposal, all of the funding currently backing these projects will be diverted to the Thunder’s new arena. That means Oklahoma City will either have to stop financing these kinds of programs or raise taxes.

The plan for the new Thunder arena will be formally presented to the Oklahoma City Council on September 26. It requires a majority vote of the nine member council, which includes the mayor, to advance. Some council members are already voicing their concerns. “There are a lot of other things that we can do with that penny that are critical infrastructure needs,” Oklahoma City Councilwoman JoBeth Hamon (D) said. “I think we have a lot of competing needs in this city that regular everyday residents have expressed to me that we prioritize, and none of them include almost $1 billion toward subsidizing a new arena.”

Several other council members, including Republicans Barbara Peck, Todd Stone, Matt Hinkle, and Mark Stonecipher, have been publicly supportive of Holt’s efforts to strike a deal with the team. If approved by the Council, the sales tax extension will need the approval of the majority of Oklahoma City voters in a special election tentatively scheduled for December 12.

Welfare for multi-millionaires

Several new NBA arenas, including the Golden State Warriors’ $1.4 billion Chase Center and the Los Angeles Clippers’ forthcoming $2 billion Intuit Dome, have been 100% privately financed, a reasonable approach for profitable businesses owned by very wealthy people. Other NBA owners have secured public financing for new facilities. But even compared to these teams, the Thunder deal stands out.

The $863 million Little Caesars Arena, home of the Detroit Pistons since 2017, was built with 63% private funds and a 37% public contribution. The $558 million Golden 1 Center, home of the Sacramento Kings since 2016, was built with 51% private funds and a 49% public contribution. The $524 million Fiserv Forum, home of the Milwaukee Bucks since 2018, was built with 33% private funds and a 67% public contribution.

In contrast, at least 94.5% of the cost of the Thunder’s new arena would be paid for by taxpayers. And it could be even more. The arena would cost a minimum of $900 million, but these kinds of projects often go over budget, and any overages would be paid for by the public.

The economics of publicly-financed arenas

Massive public subsidies for popular sports teams are typically justified in terms of the economic impact on the city. The argument is that the expenditures pay for themselves by generating economic growth and tax revenues. The data, however, does not support these claims.

An analysis of 130 studies of the economic impact of publicly financed sports venues, published in February 2022 in the Journal of Economic Surveys, found “very limited economic impacts of professional sports teams and stadiums.” Even after “non-pecuniary social benefits from quality-of-life externalities and civic pride, welfare improvements from hosting teams tend to fall well short of covering public outlays.” As a result, “large subsidies commonly devoted to constructing professional sports venues are not justified as worthwhile public investments.”

A report by the Federal Reserve Bank of St. Louis explains that public funds can generate new revenues for a city only if “the funds generate new spending by people from outside the area who otherwise would not have come to town,” or if “the funds cause area residents to spend money locally that would not have been spent there otherwise.” In practice, neither of these situations are common. The report found that tourists who attend sporting events are often “in town on business or are visiting family and would have spent the money on another activity if the sports outlet were not available.” Locals, on the other hand, usually have a finite amount of money to spend on entertainment and divert money from other activities to sporting events. For example, a “family that buys hot dogs, peanuts, and popcorn at the game would have otherwise spent that money at some other local business, perhaps going out to dinner or a movie.”

According to the Michigan Journal of Economics, the economic value of job creation in new stadiums “tends to only go to a few with massive salaries,” like star players and coaches. The rest of the jobs are part-time, low-paying positions to maintain and operate the facility. The money spent on sports venues crowds out “public work projects that have a real multiplier effect like by improving infrastructure.”

Holt has been claiming that “the direct annual economic impact of the Thunder” is “$600 million and 3,000 jobs.” But he has not released the study behind those numbers, which seem wildly out of sync with similar studies of sports teams. A study commissioned by the State of New York, for example, found that the Buffalo Bills generated $25 million a year in additional tax revenue, with most of the money ($19.5 million) coming from state taxes paid by players and coaches. The tax dollars generated by new stadiums often fall well short of the public costs.

Demands for public financing of sports venues are not based on economic reality but, according to the Berkley Economic Review, are a “power play used by these influential teams on local communities that are emotionally attached to sports teams.”

Substacks

July 25, 2024 Heather Cox Richardson

Published

7 hours ago

July 26, 2024

Substacks

TGIF: The Week Unburdened by the Week That Has Been Suzy Weiss

Published

14 hours ago

July 26, 2024

Pro-Palestinian protesters gather outside of Union Station to protest Israeli prime minister Benjamin Netanyahu’s visit to the United States. (Probal Rashid via Getty Images)

Oh, no, it’s the sister again, for another slow news week. Let’s get to it.

→ Biden dropped out: Six years ago emotionally, but technically this past Sunday, Joe Biden dropped out of the presidential race. He did it via X and promptly threw his support (and cash) behind Vice President Kamala Harris. Then he got Covid and hunkered down in Delaware—or depending on what hooch you’ve been drinking, died and was reanimated so he could appear before the cameras on Wednesday to address the nation. Joe’s family, including Hunter, sat along the wall of the Oval Office as he spoke. The president talked about the cancer moonshot, ending the war in Gaza, putting the party over himself, and Kamala’s tenacity, as Kamala’s pistol dug ever-so-slightly harder into his back. Right after, Jill, the First Lady of passive aggression, who apparently wanted to outdo her heart emoji, tweeted a handwritten note “to those who never wavered, to those who refused to doubt, to those who always believed.” I respect a First Lady who stands by her man and her energetic stepson. A First Lady who sees the high road way up there and says to herself, “If they want us out of here so bad, they can clean out the fridge and strip the beds themselves!”

→ Kamala is brat, Biden is boots, please God send the asteroid today: I’ve learned the hard way—and by that I mean my parents once asked me what “WAP” meant—that certain things should never be explained with words. It’s not that it’s impossible, it’s just that it embarrasses everyone.

That’s how I feel about the whole Kamala-is-brat thing. Brat is a good album about partying and getting older and having anxiety that was released earlier this summer by Charli XCX. But it’s since been adopted by too-online and very young people as a personality, and by Kamala Harris’s campaign as a mode to relate to those very young people. Her campaign is leaning into the whole green look of the album to try and win over Gen Z, and generally recasting her many viral moments—“You think you just fell out of a coconut tree?” “I love Venn diagrams” “What can be, unburdened but what has been”—as calling cards. It’s like when Hillary went on Broad City, only this time more cringe.

And now we have Jake Tapper and Greg Gutfeld grappling with the “essence” and the “aesthetic” and overall vibe of brat girl summer. We used to be a serious country. We used to make things.

Here’s the thing about Kamla: she is hilarious and campy, but unintentionally so. Any goodwill that her goofy dances or weird turns of phrase garner should be considered bonus points, not game play. Was there ever any doubt that Fire Island would go blue? We’ve been debating whether Kamala’s meme campaign is a good move for her prospects in the Free Press Slack, and here I’ll borrow from my older and wiser colleague Peter Savodnik: “There is nothing more pathetic than an older person who cares what a younger person thinks is cool.”

→ Boomer behavior: While Kamala’s campaign is being run by a 24-year-old twink with an Adderall prescription, J.D. Vance’s speechwriter seems to be a drunk Boomer who just got kicked out of a 7-11. Vance, appearing this week at a rally in Middletown, Ohio, riffed, “Democrats say that it is racist to believe. . . well, they say it’s racist to do anything. I had a Diet Mountain Dew yesterday and one today, and I’m sure they’re going to call that racist too.” Crickets. Horror. Major “Thanks, Obama” energy. There was also a bit on fried bologna sandwiches and a lot of “lemme tell you another story.” The guy is 39 but sounds older than Biden.

Fresher, 35-to-60-year-old blood is exactly what we’ve been begging for. Let the Boomers boom, let the Zoomers zoom. Kamala and J.D.: act your age.

Substacks

July 25, 2024 Heather Cox Richardson

Published

18 hours ago

July 26, 2024

Momentum continues to build behind Vice President Kamala Harris to become the Democratic Party’s presidential nominee, and the national narrative as a whole has shifted.

Democrats appear to be generating significant enthusiasm among younger Americans. Yesterday, for the first time in their history, the March for Our Lives organization endorsed a presidential candidate: Kamala Harris. Students from the Marjory Stoneman Douglas High School in Parkland, Florida, organized March for Our Lives after the shooting there in 2018. Executive director Natalie Fall said that the organization “will work to mobilize young people across the country to support Vice President Harris and other down-ballot candidates, with a particular focus on the states and races where we can make up the margin of victory—in Arizona, New York, Michigan, and Florida.”

Andrea Hailey of Vote.org announced that in the 48 hours after President Biden said he would not accept the Democratic nomination, nearly 40,000 people registered to vote. That meant a daily increase in new registrations of almost 700%.

People are turning out for Harris in impressive numbers. In the hours after she launched her campaign, Win With Black Women rallied 44,000 Black women on Zoom and raised $1.6 million. On Monday, around 20,000 Black men rallied to raise $1.2 million. Tonight, challenged to “answer the call,” 164,000 white women joined an event that “broke Zoom” and raised more than $2 million and tens of thousands of new volunteers.

Another significant endorsement for Harris came yesterday from Geoff Duncan, the Republican former lieutenant governor of Georgia, who wrote on social media: “I’m committed to beating Donald Trump. The only vehicle left for me to do that with is the Democratic Party. If that requires me to vote for, speak for, or endorse [Kamala Harris] then count me in!” Duncan’s public announcement offers permission for other Georgia Republicans to make a similar shift. In 1964, South Carolina senator Strom Thurmond similarly paved the way for southern Democrats to vote for Republican presidential candidate Barry Goldwater.

Harris’s appearances are generating such enthusiasm from audiences that when she delivered the keynote address this morning at the convention of the American Federation of Teachers in Houston, Texas, the applause delayed her ability to begin. After a speech defending education and calling out the cuts to it in Project 2025, Harris ended by demonstrating that after decades of Democrats being accused of being anti-American, Trump’s denigration of the country has enabled the party to claim the position of being America’s defenders.

“When we vote, we make our voices heard,” Harris said. “So today, I ask you, AFT, are you ready to make your voices heard? Do we believe in freedom? Do we believe in opportunity? Do we believe in the promise of America? And are we ready to fight for it? And when we fight, we win! God bless you and God bless the United States of America.”

Today the Commerce Department reported that economic growth in the second quarter was higher than expected, coming in at 2.8%, thanks to higher spending driven by higher wages. The country’s changing momentum is showing in media stories hyping the booming economy Biden’s team tried for years to get traction on. “Full Employment is Joe Biden’s True Legacy” was the title of a story by Zachary Carter that appeared yesterday in Slate; CNN responded to today’s good economic news with an article by Bryan Mena titled: “The US economy is pulling off something historic.”

With Harris appearing to have sewn up the nomination, the question has turned to her vice presidential pick. That question is fueling the sense of excitement as potential choices are in front of cameras and on social media advocating Democratic positions and defending the United States from Trump’s denigration. Pennsylvania governor Josh Shapiro listed the economic gains of the past years, and said: “Trump, you’ve got to stop sh*t talking America. We’ve got to start standing tall and being patriotic and showing how much we love this amazing nation.”

The vice presidential hopefuls appear to be having some fun with showcasing their personalities, as Minnesota governor Tim Walz did in his video from the Minnesota State Fair where he and his daughter went on an extreme ride. So are social media users who have dug up old videos of, for example, Transportation Secretary Pete Buttigieg explaining how he would pilot a small starfighter that had lost its auxiliary shields, or Arizona senator Mark Kelly’s identical twin brother Scott pranking a fellow astronaut on the Space Station with a gorilla suit Mark smuggled on board.

That sense of fun is an enormous relief after years of political weight, and it has spilled over into making fun of the Republican ticket, most notably with a false story that vice presidential candidate J.D. Vance wrote about—and I cannot believe I am typing this—having sex with a couch. The story is stupid, but worse are the denials of it, which have spread the story into populations that otherwise would likely not have seen it.

Just two weeks ago, Vance appeared to be the leader of the next generation of extremist MAGA Republicans, but now that calculation seems to have been hasty. Vance is a staunch opponent of abortion—the key issue in 2024—and he has been vocal in his disdain of women who have not given birth, saying in 2021, for example, that the U.S. was being run by “a bunch of childless cat ladies who are miserable at their own lives and the choices that they’ve made and so they want to make the rest of the country miserable, too.” He went on to say that people who don’t have children “don’t really have a direct stake” in the country.

Republican commentator Meghan McCain noted that Vance’s “comments are activating women across all sides, including my most conservative Trump supporting friends. These comments have caused real pain and are just innately unchristian.” Actor Jennifer Aniston, who tends to stay out of politics, posted: “I truly can’t believe this is coming from a potential VP of The United States.” Vance had called out Harris by name in those 2021 comments, and Second Gentleman Doug Emhoff’s ex-wife Kerstin Emhoff took to social media to defend Harris from Vance’s attacks on her as “childless,” calling her “a co-parent with Doug and I. She is loving, nurturing, fiercely protective and always present. I love our blended family and am grateful to have her in it.” Harris’s stepdaughter chimed in: “I love my three parents.”

Vance also ties the Republican ticket firmly to Project 2025. The Trump camp has worked to distance itself from Project 2025—not convincingly, since the two are obviously closely tied, but it turns out that Vance wrote the introduction for a forthcoming book by Heritage Foundation president Kevin Roberts, who was the lead author of Project 2025. The book appears to popularize that plan, right down to its endorsement of a “Second American Revolution,” and according to the book deal report, proceeds from the book will go to the Heritage Foundation “and aligned nonprofits.”

Now Vance’s words praising Project 2025 will be in print, just in time for the election. Yesterday, Trump posted: “I have nothing to do with, and know nothing about, Project 25 [sic]. The fact that I do is merely disinformation put out by the Radical Left Democrat Thugs. Do not believe them!”

Trump is clearly aware of, and concerned about, the changing narrative. This morning, he called in to Fox & Friends, saying, “We don’t need the votes. I have so many votes. I’m in Florida now…and every house has a Trump-Vance sign on it. Every single house…. It’s amazing the spirit…. This election has more spirit than I’ve ever seen ever before.” Tonight the Trump campaign proved their worry by backing out of debates with Harris, saying debates can’t be scheduled until she is the official nominee, although Biden was not the official nominee when they met in June.

The larger narrative shift has affected the media approach to Trump, who is accustomed to shaping perceptions as he wishes. Now, 12 days after the mass shooting at his rally in Butler, Pennsylvania, there is increasing media attention to the fact that there has still been no medical report on Trump’s injuries, although he wore a large bandage on his ear at the Republican National Convention and said at a rally in Grand Rapids, Michigan, on Saturday that he “took a bullet for democracy.”

Yesterday, FBI director Christopher Wray told Congress that it is not clear whether Trump was “grazed” by a bullet or by shrapnel, words that former federal prosecutor Joyce Vance called “FBI speak for, ‘it’s unlikely it was a bullet.’”

CNN chief medical consultant Dr. Sanjay Gupta noted last week that the people need a real medical evaluation of Trump’s injuries, explaining that “gunshot blasts near the head can cause injuries that aren’t immediately noticeable, such as bleeding in or on the brain, damage to the inner ear or even psychological trauma.” But, as Josh Marshall at Talking Points Memo has noted, much of the press has kept mum about the story.

Media outlets have reported Wray’s testimony, though, and in a social media post today, Trump called on Wray, whom he appointed to head the FBI, to resign from his post for “LYING TO CONGRESS.” Tonight, he reiterated that “it was…a bullet that hit my ear, and hit it hard.”

Perhaps eager to get back to their districts, House Republicans canceled their expected votes on appropriations bills scheduled for next week and left town today for their August recess. The House will not reconvene until early September. The government’s fiscal year 2025 begins on October 1.

—

Notes:

https://www.nytimes.com/2024/07/24/opinion/trump-lies-charts-data.html

https://marchforourlives.org/in-a-first-ever-endorsement-march-for-our-lives-endorses-kamala-harris-for-president/

https://www.reuters.com/markets/us/us-economic-growth-regains-steam-second-quarter-inflation-slows-2024-07-25/

https://slate.com/news-and-politics/2024/07/biden-economy-employment-inflation.html

https://www.cnn.com/2024/07/25/entertainment/jennifer-aniston-jd-vance/index.html

https://www.cnn.com/2024/07/25/economy/us-economy-gdp-second-quarter/index.html

https://www.mediamatters.org/heritage-foundation/jd-vance-wrote-foreword-book-project-2025-architect-kevin-roberts-and-proceeds

https://www.newsweek.com/donald-trump-might-not-shot-1930037

https://people.com/was-trump-struck-by-bullet-or-shrapnel-fbi-director-testifies-8683340

https://www.msnbc.com/rachel-maddow-show/maddowblog/trump-wants-fbi-director-resign-immediately-chris-wray-rcna163641